Europe's second-largest car maker posted a 662 million-euro($800 million) first-half auto-division loss that dragged itsbottom line into the red, as it had warned earlier this monthwhen announcing 8,000 French job cuts and a plant closure.

"The depth and persistence of the crisis impacting ourbusiness in Europe requires the launch of the reorganisation,"Chief Executive Philippe Varin said in a statement. "We have aclear understanding of how hard this project is for a largenumber of our employees."

Presenting the results as executives sought to push througha 10 percent French workforce reduction in a fresh round ofunion talks, Peugeot said its manufacturing operations burnedthrough 954 million euros of cash in the first six months assales fell 5.1 percent to 29.55 billion.

The net loss was 819 million euros, compared with ayear-earlier profit of 806 million. Asset sales reduced net debtto 2.4 billion euros from 3.4 billion at the end of December.

The job cuts and closure of the Aulnay factory near Pariswill generate 600 million euros in savings for 2015, Peugeotsaid. The company also aims to cut 550 million euros frominvestment and generate a further 350 million throughcooperation with alliance partner General Motors.